Temporary foreign workers: Filling labour gap or depressing wages?

Peter O'Neil And Tara Carman, Vancouver Sun01.07.2013

Thousands of Temporary Foreign Workers like Jesus Bernardino come to Canada each year to fill jobs proponents of the program say Canadians can’t do or don’t want. Yet low pay for temporary workers and high youth unemployment raise serious doubt about the economic and social value of bringing migrant labourers to Canada.

Jesus Bernardino constantly monitors the 150,000 plants that he looks after in one of DeVry's greenhouses in Chilliwack. Bernardino is one of the company's temporary foreign workers from Mexico.Ward Perrin, PNG
/ Vancouver Sun

News that a consortium of mostly Chinese companies will seek permission to use exclusively Chinese labour for underground work in four proposed B.C. coal mines has blown the lid off a simmering debate over the dramatic increase in the use of Canada's temporary foreign worker program.

The Harper government, which only last spring announced measures to boost the already record-high use of TFWs, has announced a program review in light of the public backlash and court challenges over the Chinese mine plan.

The controversy has put a spotlight on a program which employs workers in occupations ranging from the skilled trades and domestic and farm workers to nursing, the fast-food industry and the ski business.

Proponents argue the program, which is hugely popular with many Canadian and particularly B.C. employers, helps Canada fill a critical labour shortage. They say the program doesn't hurt Canadian workers because employers are supposed to prove the workers can't be found in Canada and that newcomers are paid a competitive wage.

But critics say TFWs are vulnerable to exploitation, have little to no recourse if they are mistreated by their employers and, according to economists on both sides of the political spectrum, their presence depresses wages and job opportunities for Canadians.

And while Canada hasn't yet experienced the critical problem facing the U.S. and Europe - of "temporary" workers who go underground rather than return when their permits expire - some experts warn of a ticking time bomb in April of 2015.

That's when a four-year maximum imposed last year on permit extensions expires. Given the current pace, there will be well over a half-million foreigners in Canada on TFW permits that year.

Immigration Minister Jason Kenney dismisses much of the criticism that TFWs suppress wages and job opportunities for Canadians, suggesting that the program's detractors - especially the NDP and unions - are engaged in "demagogy."

But he acknowledged some concern about some TFWs potentially overstaying their welcome when a huge number of permits expire for good in 2015.

"Look, I can't say I'm not without concern about this issue, but so far we have not seen signs of problems in terms of overstays in the program," he told The Vancouver Sun on Friday.

He expressed confidence that the recently beefed-up Canada Border Services Agency, and new entry-exit border controls brought in under the Canada-U.S. perimeter security agreement struck earlier this year, will help track down migrants who go underground rather than leave.

PROGRAM HAS EXPANDED

The TFW program began in 1966 when the seasonal agricultural worker program was established, and expanded in 1981 with the live-in caregiver program. Special streams for low-and high-skilled workers were also added to the program.

Over time, the TFW program has become the federal government's main tool to help businesses find workers, overtaking the traditional immigration program.

While the number of permanent economic immigrants has remained relatively constant since 2005, the number of TFWs has soared 56 per cent to 190,842 last year from just over 122,000 seven years ago.

In B.C. the number of TFW permits grew by 66 per cent over the same time period. B.C. also receives a disproportionate share of TFWs, accounting for almost a quarter of the national total (24.3 per cent) despite having 13 per cent of Canada's population.

The B.C. government argues that the province has a "population gap" rather than a skills gap, and standard sources of labour - from local training to interprovincial migration to traditional immigration from overseas - can't fill it.

"Our expectation, based on a retiring workforce and the creation of new jobs, is that one million jobs will open up over the next decade," according to Jobs Minister Pat Bell. "We expect around 650,000 people to enter the workforce from B.C. schools in the same time period. Even after we're 100-per-cent successful in training people, we still have a population gap."

Fast-food chains such as Wendy's and McDonald's are some of the biggest employers of temporary foreign workers in the country. In the case of McDonald's, many are hired to work in remote areas and resource-industry towns in northern parts of the country, company spokesman John Gibson said. The top three source countries for TFWs in this province between 2008 and 2010, including both newcomers and those with ongoing permits, were the U.S., Australia, and Mexico, according to the B.C. government. China was a distant 15th in 2010, with just 538 TFW permits issued.

In B.C., temporary foreign workers are most likely to be employed in agriculture, fast food or construction, but are by no means limited to those industries. Blueprint Events, which brings in DJs, artists and their crews to play in local nightclubs, was one of the province's biggest users of the temporary foreign worker program last year.

The artists and crews mostly come from the U.S., said owner Alvaro Prol, but also from Europe and elsewhere.

Whistler Blackcomb, which employs many youth from Australia on temporary work permits, and film production companies were also frequent users of the program.

'AMIGOS' VITAL FOR GREENHOUSE

One of the big B.C. users is Chilliwack-based bedding plant supplier DeVry Greenhouses. In the spring, the busiest time of year, the greenhouse employs about 100 workers from Mexico who make up roughly half its workforce, said owner Pete DeVry.

Without the "amigos," he is quick to add, his business could not function.

DeVry, like all employers, is required to post positions locally before offering them to foreigners.

When DeVry's operations manager Henk-Jan Roos did so a couple of months ago, he interviewed about 60 per cent of the applicants and hired six. Only one is still with the company, he said.

"They need work and as soon as they see something that looks ... a little better, boom, they're gone," Roos said, adding that local workers sometimes only give a few days' notice when they leave. "Those things make it impossible for me to plan for - never mind next month - the next day."

"Consistent, reliable work is what we receive from this program," added Pauline McLaren, DeVry's temporary foreign worker program liaison.

Jesus Bernardino, 38, has been working at DeVry's greenhouse for six years. The father of two from Mexico spends eight months a year working in Chilliwack and returns to his home in Querataro, near Mexico City, each Christmas.

Bernardino is in charge of making sure the poinsettias get the right amount of water. Too much or too little can be fatal for the delicate plants, which are finicky to grow in the Fraser Valley's cool, wet climate, and different varieties require different treatment. Bernardino is aware of all these things as he moves carefully throughout the seemingly endless rows of red, white and pink flowers that fill the greenhouse.

His day starts at about 5: 30 a.m. He lives at a nearby motel, which is paid for by DeVry, and takes a company bus to the greenhouse, where he starts work at 7 a.m.

These days, he finishes around 3 p.m., but in the busier spring season 55-or 60-hour weeks are not uncommon.

For this, he is paid the minimum wage of $10.25 an hour and is not paid extra for overtime (which is legal for farm workers). Seasonal agricultural workers pay CPP, EI and income tax, leaving Bernardino with about $1,000 every two weeks, out of which he pays for his groceries and personal items. The rest he sends home to Mexico to support his wife, eight-year-old son and four-year-old daughter. His earnings are the main source of income for the family and he will return to Mexico to join them on Dec. 15, on a flight that is paid for by the company.

Being separated for eight months of the year takes its toll on his family, Bernardino said.

"It's really hard, but this is the only way to make something for them," he said. "They always ask me, can they come with me?" He has to tell them no.

He said he would love to settle in Canada permanently and bring his family here, but the laws make it difficult.

Lucy Luna, the Abbotsford coordinator for the Agriculture Workers' Alliance, said one of the program's major flaws is that it gives employers far too much power. The workers' residency in Canada is contingent upon working for one employer, and not all are as responsible as DeVry.

Farm workers contact Luna when they need help understanding Canadian laws or tax requirements, but also when they run into problems with their employers.

This year alone, Luna has heard workers complain of not having access to running water in their homes, being beaten by their supervisor with a stick when they don't work fast enough, and living 27 to a house.

"When they come to me, they come desperate," she said.

They can complain - to police, the municipal government or the federal human resources department, depending on the situation - but doing so often means the employer will not ask them to come back the following year, Luna said.

The same applies for workers who get sick or injured and claim benefits through workers' compensation, she added. Once she explains the consequences of making such a complaint, very few choose to pursue them.

Kenney argued that Canadians have a distorted view of TFWs due to union criticism.

"I think there's a widespread misconception, created by labour unions, that the bulk of TFWs are low-skilled people who are in dangerous or in bottom-end jobs who are easily exploited," the minister said.

He said by far the largest single component is the youth exchange program, which brought in 55,000 last year, mostly from advanced economies like Britain, France, Australia and New Zealand.

"These are the Kiwi and Aussie lift operators at Whistler," Kenney said.

The next largest is the seasonal agriculture program, with 24,134 permits in 2011, while 18,530 are professionals, managers, investors and other business visitors who came last year.

That compares with 15,538 in the low-skilled category.

EMPLOYERS WANT EXPANSION

Leading the charge for more temporary workers are business lobby groups such as the Canadian Chamber of Commerce, which argues the Canadian economy is being held back by a "skills crisis" caused partly by the retirement of baby boomers.

The B.C. Business Council issued a report last year saying the province will experience a continuing shortage of engineers, tradespeople and health care workers, including nurses.

An increased use of TFWs "will be one element, and perhaps an increasingly important one, of a broader strategy to address future labour and skill shortages," the Business Council concluded.

The acceleration of the TFW program has created an odd-couple pairing of prominent economists normally at opposite extremes in public policy debates - Jim Stanford of the Canadian Auto Workers and Simon Fraser University professor emeritus Herb Grubel, who writes frequently for the conservative Fraser Institute.

"The aggressive expansion of the TFW program is part of a deliberate effort to undermine the bargaining power of Canadian workers, whether they're in a union or not," Stanford said in an email.

"It is part of a broader strategy to suppress wage growth and widen profit margins - not just in northern Alberta, but in any province and any sector. The workers who come in under the program are exploited, and treated as second-class citizens.

"Canada needs more immigration, that is clear. But immigrants have to come in with full rights and freedoms, not as quasi-indentured migrants."

Grubel describes the TFW program as effectively a business subsidy that lets frequent users avoid increasing wages to attract workers, invest in training, or automate production to boost productivity.

Canadians shouldn't "swallow this argument made by employers who would rather hire immigrants than pay higher wages," Grubel argued in an email interview.

In recent years some TFWs have started to challenge their employers through the courts and the B.C. Human Rights Tribunal over issues such as discrimination, payment and working conditions.

In a precedent-setting case before the B.C. Supreme Court, a group of former Denny's Restaurants workers from the Philippines is suing the company, alleging breaches of their employment contract.

Immigration economist Arthur Sweetman has argued that there is evidence the TFW program improves Canadian economic efficiency by bringing in foreigners with needed skills.

But he's among several in the field who say the TFW program's intake of low-skilled workers is particularly problematic for low-skilled Canadian workers, and especially new immigrants, who are squeezed out by the TFWs.

He argued the program is effectively a government subsidy for employers, who he says face an excessively low "hurdle" in terms of proving they sought domestic workers before searching overseas.

"More transparency on this program is needed, and that would improve the program's value for all of society - and not just for employers," he said in an email.

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